August 5, 2021

4 Reasons Why The Bitcoin Lightning Network Will Continue To Grow

3 min read

The Bitcoin 2nd layer payment protocol Lightning Network has been exponentially increasing its capacity throughout the previous years. Because it was released in 2018, the network’s capability has gone from under 1,000 BTC to 1,800 BTC.

The Lightning Network was very first proposed in 2015 and operates with payment channels to enable users to send out and get faster and less expensive deals than on Bitcoin’s base layer. These deals are processed “off-chain” by lightning nodes.

2021 has been Bitcoin Lightning Network’s essential year in regards to development. As Arcane Research noted, over 800 BTC has been added to its capability given that January this year alone.

More accurately, it took 39 days for the Lightning Network to go from 1,100 to 1,200 BTC and 5 days to go from 1,700 to 1,800. This information suggest that there is high demand for

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Source: Arcane Research Ryan Gentry, part of business Development department at Lightning Labs, believes the current growth comes from 4 mains sources. First, 3 business, Umbrel, RaspiBlitz, and Voltage have joined forces to produce instructional material associated to the Lightning Network. Developed by developers Leo Weese and Hannah Rosenberg, these guides have “made it stupidly simple to get a (Lightning Network) node online and linked”, Gentry stated.

The Builder’s Guide touches important subjects, such as Network Topology, channels lifecycle, payment lifecycle, billings, routing it responds Frequently Ask Questions (FAQ), and much more.

Therefore, people have access to the fundamental tools to establish their own nodes and have added to the growth of communities build around this Bitcoin-based payment option. Gentry stated:

This laid the groundwork for some incredibly vibrant neighborhoods of node runners to turn up a la Ring of Fire and Plebnet. These groups are the primordial soup out of which the next wave of LN startups will emerge IMO …

The Lightning Network Expands Bitcoin Peer-To-Peer Potential

In addition, the increase in volume made by the Lightning Network has actually brought in a “big influx of capital”. In the previous month, according to data shared by Gentry, the most popular nodes have actually gotten over $4 million in BTC.

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Source: Ryan Gentry In addition, Gentry believes that the Bitcoin Law approved by El Salvador has shown that the Lightning Network can be used to” cross the gorge”. To put it simply, to drive BTC adoption to the mainstream and close the space between early adopters and the early majority of users. Remittances can be the perfect usage case to accomplish this objective.

Finally, Gentry argues that more business are realizing that the Bitcoin Lightning Network can facilitate the monetization of liquidity, storage, bandwidth, and compute. These resources will be provided in a marketplace in the future. Gentry added:

One thing people will capture onto next is how the Lightning Network is likewise the best option to the bidder accountability problem that has afflicted software application auctions for decades.

At the time of composing, Bitcoin trades at $31,767 with sideways movement in the day-to-day chart. BTC sits at crucial assistance and a continuous fight between bears and bulls has been happening recently.

Its outcome might identify BTC’s cost future, at least, for the coming weeks.

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BTC with small earnings in the day-to-day chart. Source: BTCUSD Tradingview